Control of the Iron Throne is at stake as Murdoch's 21st Century Fox bids for Time Warner.

The implications of two of the world's largest media companies joining forces shouldn't be underestimated. Time Warner controls the likes of Warner Bros movies and New Line Cinema along with US cable giants HBO, CNN and many others. On the other side, Murdoch's 21st Century Fox owns 20th Century Fox film studios, the Fox television network and pay TV operators across Europe and Asia. Meanwhile 21st Century Fox's sister company News Corp Australia controls half of Foxtel, with Telstra owning the other half.

A deal between 21st Century Fox and Time Warner could have major ramifications for Australians hoping to see local streaming video services go from strength to strength.

In the last few years internet video has finally come of age in Australia, even though it's hampered by the new-look NBN. We've seen the rise of iTunes, BigPond Movies, Quickflix, EzyFlix, Fetch TV, Google Play, Presto and Foxtel Play – with Dendy Direct about to launch. Others are waiting in the wings, like Nine's Stream Co and Seven's proposed rival, although it looks like Hoyts Stream is on hold.

Meanwhile Netflix looms as the 800 pound gorilla in the corner. It's rumoured to be coming to Australia next year, but for now seems to be content to look the other way as Aussies sneak into the US service. Even if Netflix does officially launch locally, it won't be able to replicate its full library due to local rights deals – such as the programs controlled by Foxtel.

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Thus we come to HBO, the jewel in Time Warner's crown and certainly a key reason for Murdoch's takeover bid. Just like Murdoch, HBO is an old-world media giant determined not to lose too much power to new-world rivals like Netflix. It's no coincidence that there's no major HBO content on Netflix. Nor is it a coincidence that Netflix bit the bullet and started commissioning its own blockbuster TV shows like House of Cards. It's not an easy thing to do and even Microsoft, which loves to throw good money after bad, abandoned its original programming strategy last week along with slashing jobs at Nokia.

Both Murdoch and HBO have an interest in maintaining the status quo and keeping rivals like Netflix in their place. Around the world, HBO prefers to deal with like-minded partners like Foxtel who also embrace the idea of charging customers for expensive packages in order to watch the few shows they want. Once that business model is smashed, by the likes of Netflix, HBO and Foxtel will both be living on borrowed time unless they can reinvent themselves.

When you look at it this way, it's little wonder that HBO was happy to offer Foxtel extra exclusivity on Game of Thrones this year, forcing online rivals like Quickflix, Google and Apple to wait until Foxtel had finished screening season 4 before they could even offer the first episode. Apple seemingly spat the dummy at this deal and only added Game of Thrones to the Australian iTunes store last week. HBO wants to protect the "channel package" business model around the world, to strengthen its own position.

Now imagine what the relationship between HBO and Foxtel might look like if Murdoch controlled HBO via Time Warner. Great news for Foxtel customers happy to pay top dollar every month, but terrible news for fans of local alternatives like Quickflix and EzyFlix who might find that more of their favourite shows are locked away. Free-to-air digital TV viewers would also suffer if more HBO and other Time Warner content migrated to pay TV.

If Netflix does decide to come to Australia next year and Murdoch owns HBo, you can expect a war of words. They both have deep pockets and if the two get into some kind of price war – battling like bilgesnipe and trampling everything in their path – then smaller players like Quickflix and EzyFlix could get caught in the crossfire. They don't have the deep pockets to match content deals and slash prices. Other proposed Australian services might get cold feet and never even launch. Once again, great news for old-world giants like HBO and Foxtel, but terrible news for the rest of us who were hoping to benefit from a little competition.

If you're expecting the current government to side with Australian viewers over Hollywood and Murdoch then you obviously haven't been following the antics of our Federal Attorney General, George Brandis. He's made it clear that he's prepared to burn pirates at the stake rather than demand a better deal for Australian viewers.

If Rupert Murdoch sits on the Iron Throne then Australia's golden age of internet video may be cut off at the knees before it even has a chance to find its feet. Where do you source your entertainment and what do you see as the consequences of 21st Century Fox's bid for Time Warner?